Overseas workers for state contracts

Computer programming jobs are going to foreign workers

Updated 7:53 am, Monday, October 15, 2012

A view of the building at 24 Madison Ave. Ext. in Albany that houses GCom Software, which uses foreign workers for state contracts on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

A view of the building at 24 Madison Ave. Ext. in Albany that houses GCom Software, which uses foreign workers for state contracts on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

Photo: Paul Buckowski

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A view of a building at 1510 Central Ave. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

A view of a building at 1510 Central Ave. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

Photo: Paul Buckowski

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A view of a building at 1510 Central Ave. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

A view of a building at 1510 Central Ave. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

Photo: Paul Buckowski

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A view of a building at 1510 Central Ave. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

A view of a building at 1510 Central Ave. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

Photo: Paul Buckowski

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A view of a building at 24 Madison Ave. Ext. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

A view of a building at 24 Madison Ave. Ext. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

Photo: Paul Buckowski

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A view of a building at 24 Madison Ave. Ext. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

A view of a building at 24 Madison Ave. Ext. in Albany on Thursday, Oct. 11, 2012. (Paul Buckowski / Times Union)

Photo: Paul Buckowski

Overseas workers for state contracts

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ALBANY — Gov. Andrew Cuomo is fond of saying that New York state is once again "open for business."

But when it comes to hundreds of millions of dollars in state contracts, being open for business has a new meaning.

That's because many of the companies that have been awarded lucrative computer programming and software engineering contracts at agencies such as the Department of Labor and the Office of Technology rely heavily on foreign workers.

The practice of using foreigners — mostly Indian nationals who are brought to the Capital Region on legal work visas — is little known to a public saddled with high unemployment and stagnant wages.

But New York state has willingly embraced the use of foreign workers to fulfill state technology contracts. State officials say there is nothing wrong — or illegal — in doing so.

More Information

What's an H-1B visa?

• An H-1B visa is used by businesses to hire foreign workers in so-called "speciality" fields, such as science, engineering and computer programming.

• The federal government limits the number of H-1B visas that can be issued in a given year to 65,000, although exceptions are sometimes made.

• H-1B visas last three years but can be renewed once for a total of six years. After that, the employee can apply for a green card if the employer wants to keep him or her fulltime.

• H-1B visas can cost employers as much as $8,000 in attorney and filing fees.

Source: U.S. Citizenship and Immigration Services

Others believe the practice is an abuse of the federal government's work visa programs, which are designed to help American high-tech companies fill positions that would be vacant without recruiting overseas.

The biggest user of foreign workers on state contracts in New York is Westchester County-based IBM, which has $300 million in state contracts.

IBM has been given hundreds of millions of dollars in state aid to keep it from moving its New York operations out of the country. At the same time, IBM has brought hundreds of workers from India to fill jobs in Albany for which — in theory — plenty of Americans are qualified.

"It's very clear that IBM is exploiting the huge loopholes in the programs to bring in cheaper guest workers instead of hiring Americans," said Ron Hira, an associate professor of public policy at Rochester Institute of Technology. "Why the state continues to do this in the face of the obviousness of the practice is a real public policy question."

IBM — which has repeatedly ignored requests from the Times Union for comment — is only half the story. Because Albany is home to a large number of state operations, the Capital Region has many fast-growing small businesses and start-ups that specialize in hiring foreign workers for state contracts.

Although the companies bring in hundreds of thousands of dollars — some of them millions — in state contract money every year — they are not well known.

And they like it that way.

Immigration policy has become an emotional issue in a weak economy and companies that hire foreign workers — especially for relatively well-paid positions with state agencies — often become targets of the public's ire.

That's what concerns Girish Bhatia, CEO of GCom Software, an Albany company that uses foreign workers — many of them holding H-1B visas — and has more than $45 million in contracts with state agencies ranging from the Department of Labor to the Division of Criminal Justice Services.

Bhatia says there is a "misconception" that companies that use workers from places like India do so to save money. But using H-1B workers, he says, is the only way that companies like his that provide programmers and software engineers can fill slots because most U.S. graduates with computer programming degrees would rather work at more exciting jobs. He says he rarely gets a response from job ads in local newspapers and instead gets almost all his candidates from job websites such as Dice.com that are popular around the world.

And he says India has an oversupply of computer programmers because India is not as automated as the United States.

As a result, Bhatia estimates that about half of the 60 employees he has in Albany who work on state contracts are foreigners who hold H-1B visas or green cards.

"There are very good people here (in the Capital Region), but just not enough of them," Bhatia said. "I challenge you to go out and find three IT professionals where you live. I'll hire them. I have five openings right now."

Software engineers on H-1B visas make about $60,000 a year on average, as required by federal prevailing wage requirements, although Bhatia says he often pays more to get the best qualified workers because competition is so fierce. These people typically work at state agencies, including Bhatia, who can be found several days a week working on a project at the Division of Criminal Justice Services.

A local staffing executive who asked not to be identified because of the sensitivity of the issue agrees that there is always more demand for software engineers than the supply of available talent.

But he says that the main motivation for getting foreign workers for the jobs is that they are cheaper than similarly trained U.S. workers.

In addition, companies — and college IT graduates — now view computer programming as a commodity rather than a high-end service requiring the best and brightest minds, he said.

"Since it can be obtained cheaply, I think it undermines the value of the service," the staffing executive said.

It is unclear just how many people on H-1B visas work at state offices. Most state agencies contacted wouldn't answer questions, while others, like Criminal Justice Services, referred them to the companies involved.

The Times Union is currently seeking specific information from several agencies under the state Freedom of Information Law.

Cuomo's office was asked by the Times Union last week if the governor believes it is "good public policy" to allow foreign workers to be used on state contracts during a time of high unemployment.

"These are competitively bid state contracts, the execution of which strictly adheres to federal law prohibiting discrimination based on race, sex, national origin and a variety of other factors," Groll said.

Groll did say that state contractors must certify that their workers can legally work in the U.S. or risk having their contract terminated. The contractors must also notify state residents about potential job openings.

In 2011 alone, roughly 550 H-1B visas were awarded to companies doing business in the city of Albany.

A Times Union analysis found that as many as one-fifth of those were for foreigners likely working at local state agency offices. Overall, hundreds of H-1B recipients may be working on state contracts in the city of Albany today, even as the state has trimmed jobs.

Even though foreign workers may be a cheaper way for the state to do business they can cause major headaches, some with political ramifications.

A few years ago when the University System of Georgia put employees on unpaid furloughs because of state budget cuts, workers who held H-1B visas where exempted.

That's because federal law protects H-1B workers from furloughs, said Donna Conroy, executive director of Bright Future Jobs, a Chicago-based group that fights for the rights of high-tech workers in the U.S. In general, Conroy says, the average state worker has far fewer protections.